Global Apparel Market – An Overview | Watch NOW! | Ad
Home / Knowledge / News / Textiles / Indo-American Chamber of Commerce for pruning GST slabs
Indo-American Chamber of Commerce for pruning GST slabs
17
Jul '17
Indo-American Chamber of Commerce (IACC) has suggested some points for smooth transition of Goods and Services Tax (GST) from its truncated avatar to a full-fledged tax structure that upholds its basic principle ‘One India One tax’. It has suggested that the government should draw up a road map for reducing the number of slabs in the GST.

World over, GST or a similar comprehensive indirect tax will have either one slab or at best two. In India, the five slab tax structure makes it complicated and difficult to comply with, IACC said in a press release. “We have to draw up a roadmap for further pruning the number of rates in a time bound manner. In the given situation, it is prudent to do away with highest slab/s and amalgamating it/them with next lower slab on account of two reasons. One, any increase in rates will lead to resistance and even protracted litigations and the two, the human ingenuity is such that a product may be given a different name, shape, texture and size to fit into a lower slab,” SK Sarkar, chairman, Finance Committee, IACC, said.

For players in the textile value chain, the GST will force them to source goods and services from the organised sector. It is because natural fibres (cotton, wool) which were exempted from tax, would be taxed under GST. Since a significant portion of the textile industry is in the unorganised sector, there will be a gap in the flow of input tax credit as it is not allowed if the registered taxpayers procure the inputs from the unorganised sector, according to the IACC.

Another important issue that has to be addressed to is the conceptual ambiguity in the GST structure. A close scrutiny of the present structure—Central GST, State GST and Inter-State GST—reveals that GST has not brought any significant improvement over the earlier VAT. Under the GST, the manufacturing states feel that their interests have been jeopardized as GST is a destination based tax. “It is important to evolve pragmatic schemes that should address the genuine concerns of manufacturing states in order to shore up their faith in the dispensation,” the release states.

Next, there will be an additional cost for small businesses in the manufacturing sector. Under the excise laws, only manufacturing business with a turnover exceeding Rs 1.50 crore had to pay excise duty. Under GST, the turnover limit has been reduced to Rs 20 lakh, increasing the tax burden for many manufacturing SMEs. For many of the SMEs, the compliance will be tough, and will come at an additional cost of installing GST compliant software and training employees on how to use it. “It is ideal that some support from the government flows to the small scale sector to motivate them switch over to the GST,” said Sarkar.

“What we have to do is to constantly monitor the activities and take ameliorative steps as and when they are noticed. Also, there should be a strong say for the small and medium enterprises at the GST Council to articulate their problems,” says Vasant Subramanyan, national vice president, IACC. (RKS)

Fibre2Fashion News Desk – India


Must ReadView All

China reportedly cancels trade talks with US, Liu He visit

Apparel/Garments | On 22nd Sep 2018

China reportedly cancels trade talks with US, Liu He visit

Washington is reportedly positive about arriving at a solution to its ...

AmCham Cambodia cautions US against possible sanctions

Apparel/Garments | On 22nd Sep 2018

AmCham Cambodia cautions US against possible sanctions

In a letter to US lawmakers, the American Chamber of Commerce...

Courtesy: ycloset

Apparel/Garments | On 22nd Sep 2018

Alibaba invests in clothes sharing platform Ycloset

Chinese garment sharing platform YCloset has completed an undisclosed ...

Interviews View All

Varinder Singh Jawanda, Trendy Bharat

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Mohammad Mamun Ar Rashid, UL VS Bangladesh Ltd

Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd

Productivity, creativity and innovation play a vital role in the growth of ...

Vasanth Kumar, Max Fashion India

Vasanth Kumar
Max Fashion India

‘Traditional high-street retailers are now willing to offer franchisees to ...

Abhishek Pachauri,

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Siddhachakra Weaving (Badiya Fashion),

Siddhachakra Weaving (Badiya Fashion)

Ahmedabad-based Siddhachakra Weaving Pvt Ltd was established in 2011 under ...

Sarah Perkins,

Sarah Perkins

Fairfax, Virginia-based Specialty Graphic Imaging Association (SGIA) is a...

Iago Castro Asensio, RCfil Distribuciones S.L.

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Kevin Nelson, TissueGen

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Dr. Rene Wollert, Freudenberg Nonwovens

Dr. Rene Wollert
Freudenberg Nonwovens

Dr. Rene Wollert discusses the current scenario of the global nonwovens...

Chandani Sahi, By Chandani

Chandani Sahi
By Chandani

By Chandani is a womenswear prêt couture brand with fusion silhouettes by...

Ritu Kumar, Label Ritu Kumar

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Jay Ramrakhiani, Occasions Elegance Wear

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


September 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search